Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
Let's break down why this is correct
Answer
When a consumer is trying to maximize their utility, they want to get the most satisfaction or happiness from the goods they buy. However, it's not just about choosing the good that gives the highest total utility; they also need to think about the price of each good. For example, if a consumer loves ice cream and it gives them a total utility of 10 but costs $5, while a book gives them a total utility of 8 and costs $2, it makes sense to buy the book. This is because the book provides more utility per dollar spent. So, consumers look for the best balance between the satisfaction they receive and the money they spend to maximize their overall happiness.
Detailed Explanation
Consumers think about both the satisfaction they get and the price they pay. Other options are incorrect because This answer suggests that price doesn't matter at all.
Key Concepts
Consumer Utility Maximization
Marginal Utility
Price Elasticity
Topic
Consumer Utility Maximization
Difficulty
hard level question
Cognitive Level
understand
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